Stocks That Could Be The Next Netflix: Netflix (NFLX) is the world’s most popular video streaming service.
It has more than 167 million paid subscribers spread over 190 countries – and that’s only counting actual subscribers.
In addition to family usage, which could eventually result in new accounts as young ones move out of their childhood homes and into their own houses and apartments, there are lots of people who use Netflix without their own accounts.
According to CNBC, roughly 1 in 5 people borrow the Netflix log-in information from other people. Bloomberg values the lost revenue experienced by pay-TV from password-sharing at roughly $6.6 billion per year and growing.
Netflix Competitors Are Nipping At Its Heels
The point is that Netflix and video streaming, in general, are very popular – but Netflix is not the only streaming service on the market. It has some serious competitors – many of whom offer content that you can’t get anywhere else.
While some people will subscribe to additional providers, research in the Financial Times says that most stop at two services or less and PC Mag says that 75% of people do not plan on adding additional services.
As the world of streaming television develops and free entertainment alternatives are developed (like Pluto TV), the question isn’t whether Netflix will prevail. It may or may not.
The company could take a hit on subscriber volume or successfully open enough new markets as it loses subscribers to other providers to make up the difference.
The real question is which stock could be the next Netflix. We identified six contenders.
Disney+ Is A Major Threat To Netflix
Some of these movies, shows, and shorts are exclusive content and many of them are originals that Disney developed for Disney+.
Everything is ad-free, like you would expect for a paid video streaming service.
What makes this service unique is that Disney has ties to Hulu and ESPN, so you have the option to bundle your subscription.
Disney+ costs $6.99 per month, but if you are willing to pay $12.99 per month, you can get Hulu, Disney, and ESPN.
Of course, if you want to invest in the future of Disney+, you will need to buy stock in its parent company.
Disney makes content and sells this streaming service, but it also does many other things. There are media networks, parks, toys, FX, Freeform, ABC broadcast television network, and the TFCF corporation (aka “the company formerly-known as Twenty-First Century Fox”). Disney also owns 67% of Hulu.
Apple TV+ Is Priced To Win Market Share
Apple TV+ is Apple’s own streaming service. Like many other paid streaming services, Apple TV+ makes its own content –called Apple Originals – and everything is ad-free.
However, where Apple TV+ is different is that it does not position itself as anything other than a channel or a content producer. Apple TV+ only airs shows that Apple produces, and at a cost of $4.99 per month, it is low enough to get subscribers to add Apple TV+ to their other video viewing subscriptions – or at least that could be what Apple is hoping. Apple is pushing it hard too.
Its customers get a year of Apple TV+ when they buy a device from the company, any Apple TV counts as well as any iPhone, iPad, iPod Touch, or Mac. Apple is also giving Apple TV+ away as part of the Apple Music Student Plan.
Apple TV+ is only a small part of what Apple does. The company also makes iPhone, iPad, and Mac products as well as Apple Watch, AirPods, HomePod, and Apple Watch – but remember that Apple is also rapidly becoming a digital services company.
Apple Music is part of that as well as Apple’s different avenues that allow users to download media, such as books, games, or pod casts.
Apple also has a news subscription service called Apple News and a payment option called Apple Pay. Apple TV+ is one way for the company to diversify its offerings and wrap users into its ecosystem.
Amazon Prime Video Bundles Streaming
Amazon is a bit like Apple. While Amazon does have its marketplace and its ownership of Whole Foods Market, the company sells devices as well as content and subscriptions.
This combination forms a substantial part of its business and creates a sort of ecosystem that attracts consumers into the fold and all but guarantees future income from those parties.
Amazon Prime Video is like Apple TV+ in that it streams original content – called Amazon Originals.
However, Amazon Prime Video also offers popular movies and tv shows that Amazon does not produce. The streaming service allows people to subscribe to other channels through its platform, purchase content, or rent movies and shows. Amazon Prime Video is also unique in that a subscription to the service does more than provide streaming video – Amazon Prime.
It is actually part of a larger subscription model that includes free two-day delivery on certain marketplace items, Prime Music (a music streaming service), and Prime Video as well as other shopping incentives. The cost is $12.99 per month or $119 per year.
AT&T HBO Max Is Capitalizing On Existing Customers
ATT (T) is a telecom company. You may know it as a wireless phone service provider, but the company is far-reaching.
In addition to cellular phone services, ATT offers AT&T Internet, AT&T TV, and prepaid phone services, but really, these are just the company’s Communications Segment. AT&T also has its WarnerMedia segment.
This branch of the company develops and distributes films, gaming, and television. It includes Turner, which owns and operates several television networks, as well as Warner Brothers.
The WarnerMedia also includes Home Box Office. Better known as premium cable channel HBO, this entity includes the paid television channel component and content licensing as well as the streaming service.
ATT is using its ownership of HBO to offer something special – HBO Max. It is due to launch officially in May 2020.
Existing customers who subscribe to ATT’s premium offerings, be it mobile phone service, broadband, or premium video, will get HBO Max for Free as will subscribers to the paid tv channel HBO. Everyone else will have to pay $14.99 per month.
Comcast Peacock May Be A Surprise Winner
Comcast (CMCSA) is also a vast media company. It operates as three segments. The first is Comcast Cable – this part of the company sells mobile phone service plans, high-speed internet, voice services, and more to residential customers.
For this segment, the company operates under the brand Xfinity. Comcast also owns NBCUniversal. This part of its business is in four segments: broadcast television, cable networks, filmed entertainment, and theme parks. This includes NBC channels as well as Telemundo, Universal Pictures, and DreamWorks Animation.
The final segment in Comcast is Sky, which includes video, voice and wireless service in Europe as well as entertainment networks Sky Sports and Sky News. Comcast has some varied other interests as well including ownership of the Philadelphia Flyers. The company is diverse!
Peacock is Comcast’s video streaming service. It is set to launch in April 2020 and will feature content that NBCUniversal owns. There will be two options – an ad-based free service (Peacock Free) and Peacock Premium which will be complimentary for most Comcast subscribers. The cost for everyone else will be $4.99 per month.
ViacomCBS Can Leverage Content Galore
According to Forbes, this move is meant to help each company better compete against competitors like Netflix who are better funded and more willing to invest in certain offerings.
This move brings together CBS networks as well as BET, Comedy Central, MTV, Nickelodeon, and Paramount Pictures. ViacomCBS also owns the CW, VH1, TV Land, Pop TV, the Smithsonian Channel, and Simon & Schuster books.
ViacomCBS is developing a streaming service that will function a lot like Comcast’s Peacock. Subscribers will get access to all the assets owned by CBS as well as those controlled by Viacom for free if they choose an ad-based version or without commercials for a fee that has yet to be announced.
In a world dominated by streaming content, companies are looking for ways to make money on the assets they already own, and video streaming services is one way to do that. Each company has a slightly different value proposition and a different cost structure. For some, it is just another type of advertising.
The streaming service is meant to encourage longer-term involvement with the brand. For others, these offerings are a life line in a market that is increasingly moving away from traditional tv options. It is too early to know which one of these services will come out on top – there are sure to be casualties as well as some acquisitions and partnerships happening. Big things are coming though, so stay tuned.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.